Fair warning, my family just received a 61.5% increase in our healthcare insurance premium of 2017, on top of last year’s 24.8% increase, so I am quite annoyed at the moment. For my non-US readers, perhaps what follows will interest you as a means of understanding how and why Donald Trump came to be elected President. I am going to be channeling some of my inner crank today.
If you want to understand why Trump won the recent US presidential election, you can’t overlook the economic data. If you do, his victory may look mighty confusing, alarming even. But once you understand the degree to which the average US family and the entire Gen-X and Millennial generations are being completely hosed economically, everything starts to take shape.
As most struggling Americans can tell you, real household income has gone nowhere for more than 20 years:
This multi-decade burden of “running ever faster just to stay in the same place” is what led many US voters to reject Hillary Clinton, the establishment candidate, and instead roll the dice on the iconoclast promising to upend the system.
But if Trump’s plan to “make America great again” means a return to the 1980s and 1990s when median real incomes climbed smartly, he’s not going to be able to pull that rabbit out of the hat, I’m afraid. None of the conditions in place then are with us today including cheap, abundant energy (remember, oil was $10 a barrel in 1998); not to mention that we were riding the tailwinds produced by all of the gains from the early, explosive stage of the technology and internet revolutions.
Instead, we’re at a stage where the pie is no longer expanding — it’s now a zero-sum game where those with power are using their advantage to continue to increase the size of their slice at the expense of the rest of us. The US now routinely subjects its citizens to racketeering, charging excessive prices that are increasingly cumbersome to avoid. One example among thousands; a Viagra pill that costs less than $1 in India, costs over $38 in the US:
Cell phone plans in the US are 2x to 3x more expensive (and more limited in terms of both data and speed) than any of the other countries I’ve traveled to in the past few years. A phone bill from AT&T in Hong Kong is a single page long and clearly explains how your unlimited high speed plan ended up costing you around $30/mo. In contrast, my bill from the same company in the US runs about 30 pages, and seems intentionally opaque in helping me understand why I’m spending over $100/mo for a limited data plan with much slower speeds.
There’s no good reason for this except that in the US, companies have learned they can get away with predatory tactics by “wearing down” customers with gigantic, indecipherable billing statements.
This is pure racketeering. Your phone carrier is counting on your cable company to be running the same complexity scam. Ditto especially for all of your insurance providers whom you just know, in your heart, you’ll have to battle ferociously with for what you’re owed should you ever need to really use that coverage.
And it’s not just corporations; the government is in on the action, too. The US tax code is now over 74,600 pages in length, and the IRS cannot even get close to answering questions accurately. Yet the citizen is on the hook for getting everything exactly right or else incurring stiff penalties, necessitating the use of expensive CPAs — which is still no guarantee that an auditor’s subjective judgment might go against you.
Fun fact: during the first 26 years of its existence, the US income tax code grew by 104 pages. Over the past 30 years, it has grown by 50,000 pages.
While our politicians to expand the tax code, as far as I know nobody from any US government agency has been at all interested in the obvious price collusion displayed in this chart:
Believe it or not, there are two price lines on this chart (one red, one blue) from supposedly independent companies who are allegedly competing with each other — but most clearly are not. Humalog and Novalog are both manufactures of injectable insulin.
Insulin is an absolutely vital, non-substitutable necessity for people with diabetes and these companies saw fit to collude and jack up the prices over 1000% in ten years, from $25 a vial to over $250.
Why would two separate companies maintain the exact same price for their competing products for 20 years? I don’t have any other explanation except for collusion.
In any sane, rational and caring nation this wouldn’t have happened. But under Bush, and then Obama, such predatory behavior went completely uninvestigated let alone punished.
So it’s no wonder then that so many people looked at the ‘status quo’ candidacy of Hillary Clinton and said No thanks. Many families cannot afford more years of status quo predation by the unchecked rapaciousness of US cartels — er, corporations — and their government protectors.
Look, we all knew that the faux recovery seen over the past seven years had to end sometime, sooner or later. A “recovery”, mind you, that never actually happened except in the fantasy press releases of the government’s statistical fabricators, lovingly reproduced by unquestioning “journalists” working for corporate entities harboring deep conflicts of interest.
But the “little people” (hereby defined as those occupying the bottom 95% of the socioeconomic ladder) have long known they’ve been getting screwed. Sadly, it’s just getting worse.
The Obamacare Disaster
Obamacare (a.k.a. the Affordable Care Act) is a disaster. We always knew it was going to be. Why? Because it represents the single largest give-away to the health insurance industry in our lifetime.
Obama and the DC politicians crafted the Affordable Care Act as a monstrously large bill. And they failed to take on the biggest source of fat in the entire system: the healthcare insurance companies themselves. Of course, these companies have very well-funded lobbyists and pushing back against them on would have required real leadership and possibly cost some political capital. So they were left entirely alone, with all of the massive increases in healthcare premium costs left to be borne by “somebody” other than them.
Well that “somebody” has turned out to be pretty much everybody:
Obamacare Benchmark Premiums to Rise 25% in Sharpest Jump Yet
Oct 24, 2017
Monthly premiums for benchmark silver-level plans are going up by an average of 25 percent in the 38 states using the federal HealthCare.gov website, the U.S. Department of Health and Human Services said in a report today.
Last year, premiums for the second-lowest-cost silver plans went up by 7.5 percent on average across 37 states.
Now what’s both fascinating and part of the electorate anger is that the same government that forced Obamacare on everyone is also the same government that swears that health care inflation is running at only 2.5% to 3.5% per year over the past few years. Here are the governments numbers:
I find myself wondering what country (or planet?) those numbers are for. Because for those who actually pay for their health insurance, the answer for sure isn’t either